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14 June, 14:30

Explain the correlation between money supply and economic growth.

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  1. 14 June, 16:57
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    It is difficult to measure the money supply, but most economists use the Federal Reserve's aggregates known as M1 and M2. Gross domestic product, or GDP, is another government statistic that is tricky to measure perfectly, but nominal GDP tends to rise with the money supply. Real GDP, adjusted for inflation, does not track as cleanly and depends much more on the productivity of economic agents and businesses.
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